![]() ![]() ![]() Anything over $2 million in purchases is a dollar-for-dollar decrease in section 179 tax depreciation expense.Īnother tax benefit that was extended through 2019 with the passage of the PATH Act was the Section 168k or “bonus depreciation” provision. Total property, plant and equipment purchases must be less than $2 million in order to receive the full depreciation benefit of $500,000. Although not all property, plant and equipment purchases are included, all construction equipment and machinery purchases are allowed. One tax provision - Section 179 - allows for an immediate tax depreciation deduction of the entire cost of equipment and machinery in the year it is placed into service. Both were made permanent and retroactive to Januby the new law. With the signing into law of the Protecting Americans from Tax Hikes (PATH) Act late last year, there are two opportunities to decrease taxable income by a significant amount through depreciation. ![]() Failing to depreciate new equipment correctly Here are four tax mistakes that contractors commonly make - some that can leave serious money on the table, or worse, land you in trouble with the tax authorities. Whether it’s purchasing a new piece of equipment to replace an outdated one, or hiring extra help to handle a brand new project, they tend to focus on “taking care of business” now and put off thinking about the tax consequences until later.īut doing so often comes at a cost. On a day-to-day basis, owners and managers of contracting firms do what they need to do to keep the business running. ![]()
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